National Wine Day and Market Update (with video)

It’s about that time!  In a little bit of surprising news, the Real Estate Market in the greater Phoenix area is showing a small hint of cooling off?!  Check out our National Thing of the Day & Market Update video as we celebrated National Wine Day (May 25)!  Skip to the last minute or so for a quick Market Update or check out the Market Info graphic and stats at the end of this email.

A few very interesting numbers were reported this month.  They show a very hot market with supply and demand drastically mismatched.  However, they also confirm a cooling trend that has been developing over the past handful of weeks.

*Active listings are UP significantly from this time last month.  Listings were really low last month but still, this is a sign. 

*Under contract counts are DOWN for the second month in a row.

*Sales counts are down compared to March.

Markets do not get hotter indefinitely. The primary mechanism by which they cool down is through prices. In hot markets pricing goes up which causes demand to weaken, which means the supply gets a chance to recover. When prices go up, some buyers can no longer afford to buy and drop out. The faster that pricing goes up, the more buyers tend to drop out, at least in a healthy market.   If this is not happening, then you probably have a bubble where speculation has taken over and demand grows when prices rise. We are not seeing this.

All changes tend to start small and then grow. The current market cooling is like that. We now have supply increasing and demand falling. This will gradually release some of the steam from the over-heating engine and the market can trend back towards normality. In a normal market prices still tend to rise, but in our current market, prices are rising at an unsustainable pace.

Even though we have entered a cooling phase, it will probably take several quarters (if not years) to cool down to normal and prices will continue to rise at a brisk pace for quite some time.

As always, let us know if you have any real estate questions or needs!